Both states are facing huge state budget deficits due to the present economy, and are entertaining proposals to rescind sales tax exemptions on veterinary services to increase the incoming revenues.

The Wisconsin proposal took the state’s veterinarian association somewhat by surprise and the group is not even sure where it originated, said Kimberly Brown Pokorny, executive director of the Wisconsin Veterinary Medical Association.

According to the Milwaukee Journal Sentinel newspaper, the proposal may have arisen in a report from the state Department of Revenue. The report noted that sales tax exemptions on goods and services total more than $3.7 billion annually. The state currently faces a deficit that the Governor’s office estimates at $5.4 billion over the next two years.

According to the report, taxing veterinary services would generate about $15 million annually.

“I would ask those who make the decisions to think long-term,” she said. “We aren’t comparing apples to apples with all services.”

“I don’t know if it will necessarily have a catastrophic effect, but it will have an effect on animal welfare,” added Dr. Douglas Kratt, of Onalaska, Wisc., President of the Association.

Dr. Kratt said he saw little evidence that the present economy was dampening demand in his small-animal practice last month. But he sees it now, with clients being more reluctant to opt for certain procedures like orthopedic surgeries and dental cleanings. That is why he is concerned that any incremental increase in costs could be detrimental to animal health.

The Wisconsin Legislature is currently out of session until January, and so the proposal likely will not be taken up until then. Dr. Kratt said the Association’s Executive Board has prepared an opposition statement and intends to take up the issue more fully at its next meeting in January.

California faces a projected tax revenue shortfall of $11.2 billion for the fiscal year 2008-09. The proposal in California, put forth by Gov. Arnold Swarzenegger, calls for implementing a sales and use tax on previously exempt services including appliance and furniture repair, vehicle repair, golf, amusement parks, sporting events, and veterinary services.

In addition to the opposition it would have otherwise engendered, the proposal has irked many that it puts veterinary services in the same category with golf, amusement parks, and furniture repair.

Like Wisconsin, the California Legislature has adjourned until January, when new legislators will be coming in.

In the meantime, the California Veterinary Medical Association has called upon its members to send letters of protest to their legislators and the governor’s office.

The Association is not sure exactly how many letters have been sent, but the indications are that the number totals in the “thousands,” said Phil Boerner, a spokesperson.

According to a survey conducted by the American Veterinary Medical Association in 2003, there are three states that tax veterinary services, Hawaii, New Mexico, and South Dakota.

VIN News Service commentaries are opinion pieces presenting insights, personal experiences and/or perspectives on topical issues by members of the veterinary community. To submit a commentary for consideration, email news@vin.com.